Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from Mark Marcon - Robert W. Baird & Co., Inc.
Mark Marcon - Robert W. Baird & Co., Inc.
Good morning and congratulations on the great progress, particularly in HR BPO. I was wondering if you can talk a little bit more about your comments there; obviously the progress was terrific this quarter. In terms of getting to sustained profitability, what do you need to do from a revenue perspective and what are the further steps that you need to do from an expense management perspective to actually achieve long-term profitability in that business? And where do you think the margins can ultimately go in that business?
Russell P. Fradin
Well, I think you can tell that certainly this quarter we continued the progress that we've been on track for, but it even beat our expectations, as you could tell. And the reasons for that were pretty simple and we tried to enumerate them, namely that the large client that we were transitioning needed more work than frankly we had expected, along with the fact that one of the client liquidations that we'd mentioned lingered longer, again, than we expected, so we got the revenue benefit for this quarter. And in all honesty, absent that benefit we still would have been in the red.
And I think from our perspective there's really a couple of things. One, we are working the overhead and the infrastructure and the back office costs in that business really hard, and the team in that business, as well as what we call our shared services organization, general business services, has really done a nice job, but they need to continue on that path to work that cost base down. And I think that in an ideal world we'd love to get to sustained profitability. recognizing the smaller revenue base with the contracts that we worked our way out of.
Having said that, we still anticipate growth in that business. I think John mentioned we're beginning to see a nice pipeline buildup. I think you'll be hearing more news in the next year about signings. We are putting much more emphasis - the market is more accepting of the model we're putting forth and it's clear that it took some time for both some of the difficulties that our competitors were having and our fixing of the business to work its way through. But I think once we get to that place you will see A) nice growth in that business, and B) we're certainly not in the business to break even, so your question about target margin structure, what I can tell you is we don't think we're approving any new contracts or negotiating any new contracts where we can't make decent margins.
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